AI data centers in the United States are running into a mounting obstacle: electricity. According to Morgan Stanley, U.S. data centers could face a power shortfall of approximately 32 GW by 2028 — about 34% of the supply needed to meet projected demand. The finding underscores electricity availability as a critical constraint on the expansion of AI computing capacity: because large-scale AI workloads require continuous, high-volume power, gaps in supply translate into limits on how much new computing capacity can actually come online.

The gap stems largely from a mismatch in timelines. Grid interconnections and transmission upgrades typically take four to seven years to complete, while hyperscale data center projects are built on far shorter schedules — leaving utilities and grid operators struggling to keep pace with the rapid construction cycle. The implication is that infrastructure decisions made years in advance largely determine how much power will be available by 2028, making the shortfall difficult to close quickly.

Market Signals Point to a Possible Texas Moratorium

Market pricing suggests that increased scrutiny on data center operations could lead Texas to consider a moratorium on new developments — a policy step that would temporarily halt new data center development. The largest observed change appeared in the January 1, 2028 sub-market, where the probability rose by 6 points, consistent with heightened concerns over energy constraints. That horizon lines up with Morgan Stanley's projected shortfall date. Louisiana markets show a similar increase in the probability of a data center moratorium, reflecting the broader regional impact of power shortages.

What to Watch

Texas Governor Greg Abbott and the Texas Legislature could play pivotal roles any policy changes. Observers should monitor legislative sessions addressing energy constraints, as well as any executive orders from Abbott. Decisions by the Electric Reliability Council of Texas (ERCOT), which operates the grid serving most of Texas, or the Public Utility Commission of Texas (PUCT), the state's utility regulator, on data center interconnections could also indicate shifts in regulatory stance.

Louisiana warrants attention as well: any executive action or legislative movement by Governor Jeffrey M. Landry or the Louisiana Legislature could signal that a moratorium is being considered.